Pick n Pay sparks price war

2014-08-31 15:00

Will Pick n Pay spark a massive price war today?

It has initiated a system to pay shoppers back if it is charging more for certain products than its competitors without customers having to do anything to bring the price disparity to its attention.

People don’t even need to be aware that the prices of their sugar or baked beans in their trolleys are higher than at another supermarket.

The days of going from store to store to compare prices, or running around to get specials from three different places, are over.

From today, Pick n Pay will conduct price checks against other major retailers while you are standing at the till?–?a move that is set to shake up the industry and force its competitors to act.

The retailer has launched what it calls Brand Match, where it will be able to compare prices?–?even those on special elsewhere?–?with four major retail chains. If a product costs less elsewhere, you will get a voucher for the difference.

This only applies to what the chain says are its 1?000 most popular branded products. There are other conditions?–?you have to have 10 items in your basket, they must include one of the 1?000 products and your voucher won’t be more than R50 per shopping bill.

If you buy more than 10 products, and at least one of them is one of the 1?000 branded products, it will trigger an instant price comparison at the till.

If any of those products are cheaper elsewhere, you will receive a cash-off coupon. Pick n Pay chief executive Richard Brasher said customers were shopping around for the best deals.

“It’s as simple as that?–?we compare prices so our customers don’t have to. If we’re more expensive, you get a coupon for the difference.”

Market researcher Nielsen has compiled the list of ­ 1?000 branded grocery products that people buy the most. This represents about 50% of sales of branded groceries at Pick n Pay. Two research companies are collating the prices of these products in other supermarkets.

If the basket of branded goods is cheaper at Pick n Pay, the till slip will tell you how much you have saved. If it would have been cheaper at other supermarkets, you would et a voucher for the difference.

Asked why he did not just lower prices to match those of competitors, Brasher said the company had already lowered prices over the past 18 months, but chose this method because he could not predict his competitors’ promotions.

In this way, they are tracked and reacted to at the till, he said.

According to him, customers say they don’t have time to compare prices and go to different shops for different items. The idea is to take price out of the equation. You no longer have to compare prices for the majority of items as the shop does this for you and adjusts your price accordingly.

Brasher said this was not an aggressive move aimed at competitors, but he expected they would have to react.

City Press was unable to ask competitors what they would do in response because Pick n Pay requested secrecy until it launched its new price check today.

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